Closely watching rouble rout, says worried China
Breaking silence on Russian crisis, Beijing allays fears but says the impact is yet to play out in full
In Beijing's first official reaction to the continuing rouble rout, the foreign exchange regulator said it is closely monitoring the situation, while downplaying its impact on the mainland's economy and capital flows.
But analysts said China, the world's largest energy consumer, may feel the pain, too, if the turmoil spreads further.
"The reasons behind the rouble's slump are very complicated. The international and domestic communities are paying close attention to it," said Wang Yonggui, director-general of the policy and regulations department at the State Administration of Foreign Exchange, yesterday.
"The impact of the crash has yet to play out completely and is subject to further assessment," he said. "China's economic fundamentals and capital flow remain very stable and healthy."
"Sanctions, declines in real incomes and real rates above 7 per cent will cause a deep recession in 2015," said analysts at AXA Investment Managers in a research note. Currencies of other major oil producers in South America have also seen a sharp slide. Emerging countries in Asia have taken a heavy hit from capital outflows as a result.
Zhang Monan, a researcher at the China Centre for International Economic Exchange, told the Post that even China, which had US$3.89 trillion of foreign exchange reserves as of the end of September, could be hurt.